How to Make Sure Your Credit Score Will Help and Not Hurt You When Buying a Home

Here are some of the best ways to improve your credit score:

  1. Pay your bills on time. This is the most important factor in determining your credit score. Make sure to pay all of your bills on time, including your credit card bills, car loan payments, and mortgage payments.
  2. Keep your credit utilization low. Credit utilization is the amount of debt you have compared to your total available credit. Aim to keep your credit utilization below 30%.
  3. Have a long credit history. The length of your credit history is another important factor in determining your credit score. The longer you have had credit accounts open, the better your credit score will be.
  4. Get a mix of credit accounts. Having a mix of different types of credit accounts, such as credit cards, installment loans, and lines of credit, can help improve your credit score.
  5. Avoid applying for too much new credit. Applying for new credit can cause a temporary dip in your credit score. Avoid applying for new credit unless you absolutely need it.
  6. Dispute any errors on your credit report. If you find any errors on your credit report, dispute them immediately. This can help improve your credit score.
  7. Get a copy of your credit report from each of the three major credit bureaus once a year. You can get a free copy of your credit report from Review your credit report for any errors and dispute any that you find.

By following these tips, you can improve your credit score and get approved for loans and other forms of credit at better rates.

10 Tips for First-Time Home Buyers

Buying a home is a big decision, and it can be even more daunting for first-time home buyers. But don't worry, we're here to help! Here are 10 tips to get you started:

  1. Start saving early. The sooner you start saving for a down payment, the better. A 20% down payment is ideal, but depending on the program, you can put as little as 3% down. 
  2. Get pre-approved for a mortgage. This is where we come in!:)  This will give you an idea of the max of your purchasing power.
  3. Find a real estate agent who can help you find the right home for your needs. A good real estate agent will know the market and can help you find a home that fits your budget and lifestyle.
  4. Do your research. Before you start looking at homes, it's important to do your research and learn as much as you can about the home-buying process. There are a lot of resources available online.
  5. Be prepared to compromise. It's unlikely that you'll find the perfect home on your first try. Be prepared to compromise on some things, such as location, size, or features.
  6. Don't get discouraged. The home-buying process can be long and frustrating, but don't give up! With patience and perseverance, you'll find the perfect home for you.
  7. Hire a home inspector. A home inspector can help you identify any potential problems with the home before you buy it.
  8. Get a home warranty. A home warranty can help you cover the cost of repairs to your home for a certain period of time. (The seller usually pays for this)
  9. Be prepared for closing costs. In addition to the down payment, you'll also need to pay closing costs when you buy a home. Closing costs can range from 2-4% of the purchase price, so be sure to factor them into your budget.
  10. Enjoy your new home! After all your hard work, you deserve to enjoy your new home. So relax, unpack, and make some memories!

What is my Purchasing Power? How to Calculate Debt-to-Income Ratio for a Mortgage

Your debt-to-income ratio (DTI) is one of the most important factors lenders consider when you apply for a mortgage. It is a measure of your ability to afford monthly debt payments, including your mortgage, as a percentage of your gross monthly income.

A lower DTI ratio generally means you are a more attractive borrower and it will result in higher purchasing power.

To calculate your DTI ratio, follow these steps:

  1. Add up all of your monthly debt payments, including your mortgage, car loans, student loans, credit card payments, and any other debts.
  2. Divide the total by your gross monthly income.
  3. Multiply by 100 to express your DTI ratio as a percentage.

For example, if your monthly debt payments total $2,000 and your gross monthly income is $5,000, your DTI ratio would be 40%.

Lenders typically have a maximum DTI ratio they will accept. This maximum DTI for Non-Jumbo loans is 50%. The maximum DTI for Jumbo loans is usually between 43-45% depending on the lender.

What are the Costs Involved with Buying a Home and What Will I Be Paying After the Purchase?

There are many different payments that you may be responsible for when buying a house. Some of the most common payments include:

In addition to these payments, you may also be responsible for other costs associated with homeownership, such as maintenance and repairs. It is important to factor in these costs when budgeting for your monthly expenses.